The Challenge of the Knowledge Economy for Latin America

The international competitive environment has become much more demanding and fast paced as a result of increased speed in the creation and dissemination of knowledge, a reduction of transportation and communications costs, a growing share of imports and exports in global economic activity, a doubling of the global labor force, and the increased control of global production and distribution chains by global corporations. While more rapidly growing parts of the world, Asia in particular, are producing a diversified range of manufactured products and services, Latin America is specializing in the production of raw materials and basic commodities which are notoriously cyclical and have lower long term growth prospects. To avoid being left behind Latin American countries need to further improve their macroeconomic and institutional regimes, improve the quality and level of education and training, become more effective at tapping and making effective use of global knowledge, develop their own knowledge, and improve their information and communication technologies, as well as transport infrastructure and logistics. Addressing these challenges requires greater awareness of what is at stake, vision, developing and implementing longer term strategies, and effective monitoring and coordination mechanisms.